Thameside Construction Company Ltd v Ste

Thameside Construction Company Ltd v Stevens & Anor

Citation: [2013] EWHC 2071 (TCC)

Background Facts

In July 2010, Thameside was engaged to carry out extensive works on the Stevens' home under a JCT Intermediate Contract with Contractor's Design (2009 Revision 2).
Contract value was around £600,000 but rose to over £1 million due to variations.
There were delays and disputes over the date of practical completion and outstanding works.
Thameside submitted Application No. 16, treated as a final account, claiming ~£1.3 million.
By adjudication, a net payment of £88,606.22 plus VAT was awarded to Thameside, after adjustments for defects.
Mrs Stevens, as contract administrator, issued an interim certificate for the adjudicated sum.
The Stevens issued a withholding notice seeking to deduct £40,000 for liquidated damages and paid only part of the sum, leaving £40,000 unpaid.

Key decision:
- The court granted summary judgment enforcing the adjudicator’s award in full, ordering payment of the £40,000 balance plus VAT and interest.

Findings:
- The adjudicator clearly directed payment of a specified sum within 14 days without further deductions.
- The Stevens' later attempt to set off liquidated damages via a post-decision withholding notice was impermissible.
- The adjudicator had explicitly considered and rejected the liquidated damages claim in his analysis (setting it at £0.00 in his schedule).
- Even though the adjudicator described the valuation as similar to an interim certificate, he did not intend it to be subject to further withholding.

Outcome:
- Judgment for Thameside for the unpaid £40,000 plus VAT and interest.
- Costs of £11,000 awarded to Thameside.

Adjudicator's decisions enforceable without set-off:
- Once an adjudicator has ordered a specific payment, that sum must be paid in full without further set-off or withholding, except in rare cases expressly allowed.

Scope of permissible set-off:
- Parties cannot use a subsequent withholding notice to reduce or avoid payment of an adjudicated sum already ordered for immediate payment.
- If an adjudicator resolves a counterclaim (e.g., liquidated damages) or addresses it expressly (even by rejection), no further deduction can be made later on that basis.

Interpretation of adjudication decisions:
- The court will closely analyse the decision’s wording and context to determine whether it is intended as a final payment directive or merely a valuation for further certification.
- Here, the adjudicator’s decision was a directive to pay, not just a valuation.

Policy emphasis on cash flow:
- Consistent with the Housing Grants, Construction and Regeneration Act 1996 policy to maintain contractor cash flow (“pay now, argue later”).

Remedies for payers:
- If a paying party disputes sums, they can bring a separate adjudication or final determination but must first comply with the adjudicator’s payment order.